Chief financial officers (CFOs) of middle-market companies nationwide remain fairly positive about the state of their own industries and businesses but have tempered their views about the state of the broader U.S. and global economies, according to the latest middle-market CFO survey by Norwalk’s GE Capital.

CFO sentiment on the current health of the U.S. and global economies fell back into negative territory after turning slightly positive in the first quarter of 2011. When rating the health of their own industries, CFO sentiment also fell from the first quarter but to a lesser extent than for the broader economy, and remained positive.

CFOs continue to feel better about the general health of their own industries and companies than about the broader economy. However, CFOs have lowered near-term growth expectations.

• About one-third of CFOs (32 percent) expect their industries to grow over the next 12 months versus 55 percent in Q1,

• A majority (62 percent) of CFOs still expect their own revenues to increase in 2011, down 10 percent from Q1,

• 46 percent see moderate-to-higher company growth over the next one-to-three years, down from 56 percent in Q1.

Profitability expectations remain reasonably healthy, as a large majority (73 percent) of CFOs still believe they can maintain or improve profit margins in 2011, down 10 percent from the first quarter.

"CFOs clearly have altered their outlook on the U.S. and global economies," said Dan Henson, president and CEO of GE Capital, Americas. "However, these same CFOs maintain a more positive outlook for their own companies, indicating that they have identified the right mix of cost controls and capital investment for a lower-growth environment. This is consistent with what we are seeing with companies in our own financing portfolio, where metrics on our customers’ operating results and balance sheet health continue to be positive."

The survey, which took place during the third quarter of 2011, included responses from 532 CFOs of companies with an average revenue of $162 million.

Although slightly lower than first quarter expectations, 66 percent of CFOs say they have hired this year, and 68 percent expect to hire additional employees in the next 12 months. This is down from 80 percent in the first quarter, but still up from this time 12 months ago, when only 56 percent expected to hire.

• Of those who plan to hire in the next year, they anticipate increasing their workforce by six percent on average – a number that held steady from the first quarter survey.

Despite signs of lower economic optimism, most CFOs plan to either increase (56 percent) or keep their cost structure the same (27 percent) in 2011.

"Although CFO sentiment has fallen back since the first quarter, their willingness to increase their company’s cost structure shows confidence in their markets," said Henson. "Our equipment finance and lending business pipelines remain strong, which shows most industries are investing now and in the next 12 months."

Other Top Findings:

• Capital Expenditures – Expectations for capital expenditures increased slightly from the first quarter of the year with 37 percent of CFOs indicating their 2011 spend would be greater than 2010.

• Credit Availability/Cost – CFOs say credit availability has remained stable over the last 12 months and 60 percent of CFOs believe the cost of capital will remain the same throughout the remainder of the year.

• Equipment Financing – Thirty-seven percent of CFOs expect to consider additional financing for equipment in the next year.

• Pricing Outlook – Fifty-six percent of CFOs expect to raise prices on their company’s products or services in 2011.